FBI espionage probe goes beyond Israeli allegations

Warren P. Strobel

Knight Ridder Newspapers

WASHINGTON - An FBI probe into the handling of highly classified material by Pentagon civilians is broader than previously reported, and goes well beyond allegations that a single mid-level analyst gave a top-secret Iran policy document to Israel, three sources familiar with the investigation said Saturday.
The probe, which has been going on for more than two years, also has focused on other civilians in the Secretary of Defense's office, said the sources, who spoke on condition they not be identified, but who have first-hand knowledge of the subject.
In addition, one said, FBI investigators in recent weeks have conducted interviews to determine whether Pentagon officials gave highly classified U.S. intelligence to a leading Iraqi exile group, the Iraqi National Congress, which may in turn have passed it on to Iran. INC leader Ahmed Chalabi has denied his group was involved in any wrongdoing.
The linkage, if any, between the two leak investigations, remains unclear.
But they both center on the office of Undersecretary of Defense Douglas Feith, the Pentagon's No. 3 official.
Feith's office, which oversees policy matters, has been the source of numerous controversies over the last three years. His office had close ties to Chalabi and was responsible for post-war Iraq planning that the administration has now acknowledged was inadequate. Before the war, Feith and his aides pushed the now-discredited theory that former Iraqi leader Saddam Hussein was in league with al-Qaida.
No one is known to have been charged with any wrongdoing in the current investigation. Officials cautioned that it could result in charges of mishandling classified information, rather than the more serious charge of espionage.
The Israeli government on Saturday strenuously denied it had spied on the United States, its main benefactor on the global scene.
The American Israel Public Affairs Committee, the powerful pro-Israel lobby that top officials said is suspected of serving as a conduit to Israel for the mid-level analyst, also has denied any wrongdoing.
That analyst, Larry Franklin, works for Feith's deputy, William Luti, and served as an important - albeit low-profile - advisor on Iran issues to Feith and Deputy Defense Secretary Paul Wolfowitz.
Franklin, a former Defense Intelligence Agency analyst who lives in West Virginia, could not be reached for comment Saturday.
Investigators are said to be looking at whether Franklin acted with authorization from his superiors, one official said.
Two sources disclosed Saturday that the information believed to have been passed to Israel was the draft of a top-secret presidential order on Iran policy, known as a National Security Presidential Directive. Because of disagreements over Iran policy among President Bush's advisors, the document is not believed to have ever been completed.
Having a draft of the document - which some Pentagon officials may have believed was insufficiently tough toward Iran - would have allowed Israel to influence U.S. policy while it was still being made. Iran is among Israel's main security concerns.
Two or three staff members of AIPAC have been interviewed in connection with the case. In a prepared statement, AIPAC said any allegation of criminal conduct was "false and baseless." It is "cooperating fully," with investigators, AIPAC's statement said.
Israeli officials insisted they stopped spying on the United States after the exposure of Jonathan Pollard, who was arrested in 1985 and sentenced to life in prison for spying for Israel.
White House spokesman Scott McClellan declined to discuss the continuing investigation.
"Obviously any time there is an allegation of this nature, it's a serious matter," he told reporters traveling with Bush in Ohio.
In a statement issued late Friday, the Pentagon said it "has been cooperating with the Department of Justice on this matter for an extended period of time. It is the DoD (Department of Defense) understanding that the investigation within the DoD is limited in its scope."
But other sources said the FBI investigation is more wide-ranging than initial news reports suggested.
They said it has involved interviews of current and former officials at the White House, Pentagon and State Department.
Investigators have asked about the security practices of several other Defense Department civilians, they said.
Franklin's name surfaced in news reports last year when it became known that he and another Pentagon Middle East specialist, Harold Rhode, met in late 2001 with Manucher Ghorbanifar, an Iranian arms merchant who played a role in the 1980s Iran-Contra scandal.
Defense Secretary Donald Rumsfeld said publicly last year that nothing came of the meeting, which reportedly was brokered by former National Security Council official Michael Ledeen.
Rhode could not be reached for comment Saturday.
Feith has long been close to Israel. In 2000, he helped author a paper, "A Clean Break," that advised incoming Israeli Prime Minister Benjamin Netanyahu to adopt a much tougher approach to the Palestinians and Israel's Arab neighbors.
A former Feith employee, Karen Kwiatkowski, has described how senior Israeli military officers were sometimes escorted to his Pentagon office without signing in as security regulations required.
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(Knight Ridder correspondent John Walcott contributed to this report.)